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New York City real estate investor Gabriel Jeidel has been actively buying up struggling, small-market malls over the past few years.
His GJ Realty’s recent purchases include the largely vacant 220,000-square-foot Leavenworth Plaza in Leavenworth, Kan., a city of 35,816; and a 300,000-square-foot shopping center in Bemidji, Minn., a city of 13,528.
The Columbus market, where FairOaks Mall is located, is slightly larger, serving a city population of 45,429.
City and economic development specialists in the Kansas and Minnesota municipalities say they’re increasingly skeptical that Jeidel and his leasing company can orchestrate a turnaround of the Leavenworth Plaza or the Paul Bunyan Mall in northern Minnesota.
In the case of Leavenworth Plaza, GJ Realty bought the shopping center in 2008 and touted “redevelopment and a new tenant mix” for the property, which was reported to be one-quarter vacant at the time.
Today, about 163,000 square feet of the mall’s interior space is vacant and closed to customer traffic. The property is up for sale, according to the Dial Companies, a property management firm in Omaha, Neb., overseeing operations.
Officials in Kansas, Minnesota and Nebraska who have met or talked with Jeidel, the principal of GJ Realty, describe him as aggressive, but in the words of one real estate executive “more of a sure-bet kind of guy.”
“There’s been talk at times that they’d bulldoze the mall and create an opportunity to build something new. And then a state representative wanted to use the site as a satellite campus for a community college, but the city opposed that because it would take the property off the tax rolls,” said Steve Jack, executive director of Leavenworth County Community Development Corp.
J. Scott Miller, Leavenworth’s city manager, said the plaza “is more vacant now than it was when (GJ Realty) bought it. I’ve been in this business a long time, and actions speak louder than words. They bought it 2008, and the mall has less people in it than in 2008. Good ideas are floated that unfortunately don’t come to fruition.”
John Chattin, Bemidji city manager, called GJ Realty’s purchase of Paul Bunyan Mall “great news” in The Bemidji Pioneer newspaper when that Minnesota deal was announced Dec. 31, 2012. But earlier this month Chattin summed up his feelings in a single word, “pessimism,” when asked in a phone interview for his review of current conditions.
“We had hoped for more occupancy and greater things,” Chattin said, pointing out that the mall historically attracted shoppers from 80 or 90 miles away and roughly 85 percent of sales came from people living outside the city.
“I know they are working diligently. I hear rumors about new tenants. But just recently a jewelry store announced it’s leaving the mall,” Bemidji Mayor Rita Albrecht said. City officials estimate the mall is close to 40 percent vacant.
Paul Bunyan Mall manager Susan Goudge declined to discuss financial matters.
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